Functional Area Interrelationships
[Name]
BUS 475
April 7, 2014
[Instructor’s Name]

Functional Area Interrelationships
Kudler Fine Foods has been a successful business right after its opening back in 1998. From the very beginning, Kudler Fine Foods was able to set their mission and have been using it as their compass to work toward continued success. Along the way, Kudler Fine Foods has been able to identify the key positions that support the company. This paper will describe how Kudler Fine Foods uses those key positions and functions to work together in a collaborative process between all the functioning groups allowing for a more streamline operation. Both lateral and vertical collaboration is needed in order to keep continued success. Finally, key stakeholders are identified and a description of their role in the collaborative process will be presented. These functional area interrelationships are what allow Kudler Fine Foods to continue being successful and hope for future expansion.
In June of 1998, Kathy Kudler turned her passion of cooking and shopping for fine foods into her dream business of Kudler Fine Foods. She found refuge and stress relief from her high pressure job for a large defense contractor. Hoping that there were more people that shared the same passion as her, she opened her first store. Kudler’s mission was simple: “to provide our customers the finest in selected foodstuffs, wines, and related needs in an unparalled consumer environment” (Kudler Fine Foods, 2014). By providing their customers the finest products and a knowledgeable staff, Kudler’s primary reason is to be the number one choice of consumers that want the very best. They provide a fresh bakery and pastries, fresh produce, fresh meat and seafood, as well as the finest wines and cheeses. By being successful in their endeavors, Kudler has been able to expand and grow to currently three different locations in the San Diego area meeting one of their other reasons for existence. By expanding their locations, Kudler is able to serve more customers and offer better value to allow those customers to continue coming back. Kathy Kudler opened Kudler Fine foods in 1998 after developing a strategic business plan and obtaining the finances needed for her first store. In the beginning, the store had a simple organizational structure with the owner Kathy Kudler having multiple roles within the business. Kathy Kudler managed the store employees as well as overseeing the daily operations of the store. As the business grew and her next store opened in 2000 and eventually her third store opening in 2003 the organizational structure changed within the company. Now with three locations, the organizational structure of Kudler Fine Foods has evolved into a functional organizational structure. A functional organization structure is one in which units or departmental groups are identified based on the tasks, people, and technologies such as accounting, marketing, sales, and human resources. These units are divided into separate “functional” groups with procedures for coordinating and integrating their activities into the business’s structure. In this structure Kathy resumes the position of president with overseeing her three store managers, director of store operations, director of administration and human resources, and director of finance and accounting. Each of these department managers has employees in their departments that they directly manage including accounting assistants, administrative assistants, and inventory and purchasing personnel. This organizational structure allows Kudler Fine Foods to be competitive and strive in their market share.
The functions of Kudler Fine Foods are categorized into sales and marketing. The collaboration between the two divisions of the company are vital to the success of Kudler Fine Foods. The sales division of the company is responsible for selecting as well as pricing merchandise, maintaining inventory of products and successful customer interactions. Kudler Fine Foods does not have a purchasing department, store managers are held responsible for determining what merchandise is needed for the store and to obtain those quality items at a responsible price. At a lower chain of command, department managers, have the duty of ensuring there are higher quantities of products which sell more quickly and low selling items do not exceed service levels because excessive inventory ties up monies that can be used to acquire popular merchandise. Customers maintain the business and the objective for Kudler Fine Foods is to have a customer service level of 95% meaning that 95% of the time a customer will find the merchandise they are looking for. The sales division is dependent upon the marketing division and vice versa.
The marketing division is mainly developed by advertising. Kathy the founder of Kudler Fine Foods is solely responsible for preparing advertisements for local newspapers by collaborating with store managers. Kathy has to contact each store manager and determine which items they are able to sale for the upcoming week. Although there are three different stores located in La Jolla, Del Mar and Encinitas, California, Kathy prepares one ad for all three stores. When she is deciding which items will go on sell it is important to make sure that each store has an adequate supply of merchandise. This is a reason why the collaborative efforts of the sales and the marketing division are so important to the company. If the stores where incapable of maintaining such a decorum them sales would decline and marketing efforts would be ineffective, resulting in lower profit margins and fewer funds for marketing strategies.
Kudler Fine Foods have experienced significant growth and is now focused on expanding their services, improving the efficiency of its operations, and increasing the consumer purchase cycle as a means to increasing the loyalty and profitability of its consumers. Yvonne Reynolds operations manager of Kudler Fine Foods needs to collaborate with purchasing and inventory managers. This collaboration between purchasing and inventory is a lateral action. The action needed is more orders of what the customer requests. Therefore, by meeting the customer needs a competitive edge would be established in the marketplace. This requires a team effort. Since fresh fine food is not cheap, Yvonne Reynolds will need to increase overall revenue by creating a frequent shoppers' plan. This plan needs presentation to the Accounting Manager Mr. Stephen Harvey. When presented to the accounting manager, this collaboration would be a vertical move. This frequent shopper plan will be given to our loyal customers at Kudler Fine Foods.
One of Kudler Fine Foods stakeholders would be their customer base; this would be their current and all new customers. They need to know what their customer is looking for and what makes that product so interesting to the public. Kudler Fine Foods has established a list of long-term customers, and they work hard to keep their existing customers happy but they try to come up with new ways to bring in new customers. If they concentrate on their existing loyal customers they know that their competitors have that many fewer customers, and with this being a fine food are specialty food store it is important to keep customers and it is good to bring in new ones.
Profitability is a key factor to any company and with Kudler Fine Foods there is no exception. When any stakeholder, whether it be potential investor, a current investor, or just the customer, they want to feel reassured that this company is profitable. They can see that the company is offering what the public is looking for and that the public is happy with the product offered. Another key stockholder would be the suppliers, with any store they have to have product to see so they go to the supplier to buy and then resell it in their stores, and with this store they offer many different produce and wines and other foods but not just any they have some products that other stores done offer, this makes them a step ahead of the rest.
After Kathy Kudler discovered there was a market for the industry of fine foods in California, her business planning resulted in a successful operations and the opening of two more stores. Kathy remains successful because she understands that a collaborative effort between her and the different departments of her company must function well together in order to provide her customers with the service and fine foods they seek. She first began with a simple infrastructure, maintaining and overseeing multiple divisions of her company by herself. As her business grew she had to delegate responsibilities, define departments and learn how to integrate the new segments of her company in order to follow through with strategic objectives. Those objectives include but are not limited to increasing profitability and continuously increasing their loyal customer base. The future expansion of Kudler Fine Foods is dependent on this concept and will continue to strive as long as lateral and vertical collaborations are preserved.

References
Kudler Fine Foods. (2014). Kudler Fine Foods. Retrieved from https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Kudler2/intranet/index.asp
Pearce II, A. J., & Robinson, R. B. (2009). Strategic Management (11th ed.). New York, NY: McGraw-Hill.